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All Greened Out (Until The Asteroid Comes)

Okay, it’s been a while since I’ve written about “green” supply chain management. To be honest, I’m a bit “greened out” at the moment. I feel like I did a few years ago, when RFID was all the rage. The first few months of RFID were exciting, learning about the technology and listening to executives at Walmart, Gillette (now P&G), and other early adopters talk about their ambitious plans. But as the months went by, there were fewer and fewer new developments to discuss or analyze. Every conference had the same set of speakers, and all the case studies (what few there were) started to sound the same. I think we’ve reached a similar plateau with green supply chain management.

A lot of great work is still being done, and more companies are active in this area than 18 months ago, but the stories are starting to get repetitious. I attended numerous conferences this year, and all them had a session or speaker focused on green supply chain management (in some cases, I was the featured speaker, so count me among the guilty). The bulk of the case studies presented at these events can be summarized as follows: companies are recycling more; they’re reducing the amount of packaging used in their products; they’re eliminating “bad” materials from their products and packaging; they’re building LEED-certified stores and distribution centers; they’re optimizing their transportation operations; they’re producing more energy-efficient products; they’re measuring (well, estimating) their carbon footprint; and they’re participating in programs such as SmartWay and the Carbon Disclosure Project.

Now, don’t misunderstand me. While the overarching themes of the case studies out there are similar, the details of how each company is executing their strategies remain interesting and differentiated. I still walk away from most presentations with a nugget or two of new insights. For example, I was briefed recently by Cisco Systems on their sustainability efforts, and when the discussion ended, I came away with a deeper appreciation for the challenges, complexities, and opportunities companies face in this area. I’ll write more about Cisco in the future, but you can hear their story directly by attending ARC’s “Winning Strategies and Best Practices for Sustainable Manufacturing Forum” in February. Angel Mendez, Sr. Vice President, Global Supply Chain Management at Cisco, is one of the keynote speakers. As I’ve written about before, most companies are still in the information-gathering stage when it comes to green supply chain management, and most people haven’t attended as many conferences as I have in the past year, so I encourage supply chain professionals to keep attending as many conferences and reading as many articles on this topic as they can.

But as an analyst that gets paid to look ahead, to think about what comes next, I guess I’m ready for the next phase of innovation in this area. Here are a couple of case studies that I’m still waiting to hear:

A company that redesigned and optimized its supply chain network using carbon minimization as a constraint or a key objective. At the moment, most companies are just measuring (estimating) their carbon footprint and comparing the footprint of one scenario versus another. But I haven’t yet come across a company that decided to incur higher supply chain network costs (however small) in exchange for a lower carbon footprint. This relates to a point I’ve made before: Green is good for business because only green initiatives that are good for business (or mandated by the government or Walmart) get done.

A company that reduced the number of SKUs it produces or carries because these products were consuming resources disproportionate to their financial contribution. By “resources” I don’t only mean materials and energy, but also all the time, labor, and costs associated with designing, manufacturing, and distributing a product. To put it more bluntly, there’s a lot of crap being manufactured and sold out there that most people could live without. Just page through some of the holiday catalogues you’re receiving in the mail today. Do we really need, for example, a SmartShopper Grocery List Assistant? I guess some people do, based on the positive reviews on the site. But I’m willing to bet that when the time comes to pay for the paper refill ($7.95 plus shipping) and replace the batteries, many of these gadgets will go from the fridge, to the kitchen drawer, to the garbage, and then to the landfill. A magnetized notepad and pen hanging on the fridge is a much simpler and cheaper solution. This point relates to an issue Dan Gilmore commented on earlier this year: companies are adding so much complexity to their supply chains (e.g., SKU proliferation) that it’s becoming harder for them to remain profitable and efficient.

I’m optimistic that 2009 will bring new twists and turns related to green supply chain management. For example, how will the regulatory environment change in the US next year (e.g., cap-and-trade?) with Obama as President and the Democrats having more control of Congress? How long will the financial crisis and the economic downturn last, and will companies invest more or less in green initiatives during this period? Will the momentum for changing the status quo dampen if oil prices stay in the $60-$70 range in the near future? These types of questions will certainly generate a lot of worthy discussions and analysis in the months to come.

Now, about that asteroid…A few weeks ago, I grabbed one of the many unread magazines on my nightstand as I headed to the airport. After we were in the air, I took the magazine out (the June issue of The Atlantic) and I immediately noticed the cover art: a fiery asteroid hurdling towards Earth. The title of the cover story was “The Sky is Falling”, and the subtext read: “It’s inevitable: asteroids with the power to annihilate us will come this way. Can NASA divert them before it’s too late?” Whoa! Why haven’t I heard about this before, and why isn’t anyone panicking?!?!

The article argues that the odds of a life-annihilating space rock hitting our planet is much greater than we once thought, and that such an impact would disrupt our climate pattern and trigger a prolonged period of global cooling. Of course, none of us would be around to care very much, but that’s beside the point. Depressed, I put on my headphones and started to watch TV (it was a JetBlue flight). As I surfed through the channels, I stumbled upon a History Channel documentary on-I’m not kidding-how an asteroid might destroy our planet! This was officially the worst flight of my life. Then, in early October, I learned that a meteor entered the Earth’s atmosphere and burned up over Sudan. While the meteor did not pose a threat to us due to its small size, the frightening part of the story is that NASA only became aware of the meteor’s existence and its Earth-bound trajectory just twenty-fours earlier! I say forget about bailing out the automotive industry, send my tax dollars instead to the folks tracking those rocks in space.

I know what you’re saying: Adrian, stop worrying about this questionable threat, these encounters you’ve had with asteroids and meteors are just a coincidence. You’re probably right, but I can’t help but wonder that maybe all of this “green” stuff is just a waste of time, or a way to pass time, until God hits the reset button and the world turns dark and cold again. He told Noah that He would never destroy the Earth again with a flood, but He never said anything about an asteroid.